How do I correct a transaction from 2016?

Hello, bluejay21.

I hope you're doing well. I'll take this opportunity to help you in cleaning up the $700 credit from the 2016's transaction. 

I take it that the $700 "credit" was not deposited in your bank. Since it's sitting under the Undeposited Funds account, we'll want to delete it to clean up your books. 

Doing this won't affect your reconciled transactions on the bank (it wasn't deposited). 

To delete it, open the transaction, click on the More button, then select Delete. Hit Yes on the confirmation prompt. 

However, if that transaction has been deposited to your bank from the Undeposited Funds account, we can write off the credit with a journal entry. 

Here's how: 

1. Click the + New button, then select Journal entry. 
2. Set the correct Journal date for the correction. 
3. Under Account, select the Accounts Receivable account. 
4. For the second line, select an offsetting account (this could be an expense account).
5. Enter the amount for the Debits and Credits column. 
6. Under Name, select the Refund check customer profile. 
7. Once done, hit Save and close. 

After making the journal entry, we'll want to close off the balances:

1. Click the + New button, then select Receive payments.
2. Select the Refund check customer profile under Customer.
3. Check the initial transaction (from 2016) under Outstanding Transactions.
4. In the Credits section, check the new journal entry we created.
5. Once done, hit Save and close.

This creates a zero payment transaction under the customer profile and zero-outs the credit of $700. 

I would also like to add that this will affect your account balances. Also, if you're unsure what offsetting account to select, and where to put the amount of $700, let's consult an accountant. They'll guide us properly on how to record the correction. 

This is just a general idea of offsetting the customer balances. Different accounts and steps to close off the transactions may be used, depending on how the initial transaction was recorded. So, once again, we can check with an accountant for guidance. 

After making the corrections, do you also need to send out customer statements to remind them of their due balances? Check out this guide for more details: Create and send customer statements in QuickBooks Online. 

I'm willing to help out again if you have more concerns about managing your customer balances. If you need help with other entries, or running reports, let me know and I'll assist you.